PEER COMPANIES

Loading data...

PEER COMPANIES

NEW DELHI: Reliance Industries Ltd (RIL) is slated to come out with its earnings for the quarter ended June 30 post market hours later today.

The oil & gas major is expected to report a net profit of Rs 5,289 crore, up 18 per cent Y-o-Y, compared to Rs 4473 crore reported in the year-ago period, aided by a sharp decline in currency, according to an ET Now poll.

However, total sales for the current fiscal are expected to fall by 5.9 per cent YoY to Rs 89,271 crore compared to Rs 94,926 reported in the year-ago period.

Shares of Reliance Industries which have second largest weightage in the benchmark index has rallied a little over 3 per cent so far in this week ahead of results.

"What makes the current set up on RIL interesting is the fact that the stock has rallied in the last few trading sessions and is showing signs of gathering momentum as if markets have already sensed some substantial positives from its numbers on Friday," said Kunal Saraogi, CEO at Equityrush.com.

"We expect the stock to break its near term resistance of Rs 920 and rally further from here as the stock looks bullish on its short and medium term charts after a long time," he added.

Most analysts have a positive view on the stock and expect it to rally ahead of results. With expectations of positive results a good pop-up on the stock cannot be ruled out on Monday.

The recent price movement in Reliance Industries is an up move from the support base of multi-year consolidation.

The current up move from Rs 674 is a part of larger pattern formation that began from January 2008 top at Rs 1,626. It is a part of the five years of consolidation. Therefore, it is a good level to initiate long position at the current price of Rs 864.

"If the pattern described above holds, and if the present multiyear consolidation continues and if the stock breakout of this multiyear consolidation, then the low of June 2012 i.e. Rs 674 would most probably not be tested for couple of years," said B irendra Kumar Singh, Technical Analyst, FRR Shares.

"Strategy would be to continue to hold the existing long positions. In case of a correction fresh long position can be initiated between Rs 890-860 levels," he added.

RIL trades at 11.3x FY15E adjusted EPS of Rs 84.4 and company's new refining/petrochemical projects are likely to add to earnings from end- FY15E/FY16E.

Analysts advise investors to adopt Long Strangle, Long Call Butterfly, Long Call Ladder and Long Put Butterfly as some of the strategies that can be deployed ahead of RIL results and keep the position open depending on their own time frame or till expiry.

We have collated recommendations from various analysts as to what investors should do with RIL stock ahead of its crucial results:

Kunal Saraogi, CEO at Equityrush.com

Reliance Industries might well fuel the next leg of the current rally and may scale to Rs 1050 levels should the results be to the markets liking.

We recommend buying into the stock not only with the Monday's pop in mind but as a medium term positional hold with a 3-month target price of Rs 1065.

Manoj Muralidharan, AVP- Derivatives, IIFL PReMIA

The scrip witnessed excellent delivery of around 36.71 lakh which is almost 1.5 times more than 5-day average. A Rs 920 strike call option has seen excellent buying. Good put writing has been seen at Rs 900 strikes.

A good cash-based buying followed by O-T-M Call buying along with long build-up in derivatives market, we expect Reliance to see positive momentum in short term, specifically tomorrow.

Traders should take a covered call by buying, RIL July futures at Rs 915 and sell 940 strike call option at 11, with stop loss of Rs 880 for a target of Rs 940.

Reliance Industries Limited (RIL) is in bullish terrain. After a long bout of sluggish movements and range bound price action, the stock has managed to commit profits for its traders and investors on the buy side!

RIL was sideways between Rs 775 and Rs 855. After having gone past the Rs 855 mark, it has seen a very smooth rally which has taken it to its present price level of Rs 915.

Going forward, I am of the opinion the stock can achieve Rs 940 in the short term and can go past the 1000 mark in the medium term.

Nidhi Saraswat - Senior Research Analyst at Bonanza Portfolio Ltd.

Technically, the stock has shown consolidation within Rs 765-850 and then given breakout in last few weeks, which is positive indicator. Investors can go long in the stock with near term stop loss below Rs 880 and likely target of Rs 975-1000.